South By North Strategies, Ltd.

Local Labor Markets Deteriorate Over The Year

CHAPEL HILL (December 1, 2011) – Between October 2010 and October 2011, unemployment rates rose in 78 of North Carolina’s 100 counties and in 12 of the state’s 14 metropolitan areas. At the same time, 36 counties and 5 metros had labor forces in October that were smaller in size compared to one year ago. These findings come from new estimates from the Division of Employment Security.

“Unemployment rates rose across most of North Carolina during the past year,” said John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “In 53 counties, at least 10 percent of the labor force was unemployed in October, up from 44 counties a year ago. Similarly, the size of the labor force fell in 36 counties, which indicates that joblessness is more widespread than captured in the official unemployment measure.”

Since the economy fell into recession in December 2007, North Carolina has lost, on net, 7.2 percent of its payroll employment base (-300,500 positions) and has seen its unadjusted unemployment rate climb from 4.7 percent to 9.7 percent. In October, the state netted 5,500 payroll jobs. Since bottoming out in February 2010, the state’s labor market has netted an average of 1,100 jobs per month, resulting in a cumulative gain of just 22,500 positions.

Between September and October, unemployment rates fell in 83 counties. Unemployment rates nevertheless were at or above 10 percent in 53 counties. Individual county rates ranged from 5.4 percent in Currituck County to 16.6 percent in Scotland County. Compared to a year ago, unemployment rates were higher in 78 counties, unchanged in 4 counties, and lower in 18 counties.

“Non-metropolitan labor markets remained especially weak in October,” added Quinterno. “Last month, 10.6 percent of the non-metro labor force was unemployed, compared to 9.3 percent of the metro labor force. Over the year, the size of the rural labor force and the number of employed rural residents rose by 1.2 percent and 0.9 percent, respectively, but the number of unemployed individuals jumped by 4.1 percent. This dynamic drove the unemployment rate to 10.6 percent from 10.3 percent. Compared to December 2007, the non-metro labor force now is 2.8 percent smaller. Similarly, the number of employed rural residents has fallen by 8.1 percent, while the number of unemployed rural persons has grown by 86.1 percent and now totals 138,210.

Last month, unemployment rates rose in 12 of the state’s metropolitan areas and held steady in one metro, Hickory-Morganton-Lenoir. Rocky Mount had the highest unemployment rate (13 percent), followed by Hickory-Morganton-Lenoir (11.7 percent). Durham-Chapel Hill had the lowest rate (7.5 percent), followed by Asheville (7.7 percent).

Compared to October 2010, unemployment rates were higher in 78 counties and 12 metros. Moreover, 36 counties and 5 metros had smaller labor forces. Among metros, Hickory-Morganton-Lenoir recorded the largest decline in the size of its labor force (-1.8 percent), followed by Wilmington (-1.5 percent). Fayetteville posted the largest increase (+2.4 percent), followed by Winston-Salem (+1.8 percent), and Greensboro (+1 percent).

In the long term, any meaningful recovery will hinge on growth in the state’s three major regions: Charlotte, the Research Triangle, and the Piedmont Triad. Yet growth remains sluggish. Collectively, employment in these three metro regions has fallen by 3.7 percent since December 2007, and the combined October unemployment rate in the three metros equaled 9.1 percent. Of the three broad regions, the Research Triangle had the lowest unemployment rate (8 percent), followed by the Piedmont Triad (9.8 percent), and Charlotte (10.5 percent).

“North Carolina’s local labor markets recorded few meaningful improvements over the past year,” said Quinterno. “Statewide job growth has been anemic at best, and as a result, unemployment rates actually have risen across much of the state.”

“Labor market indicators continue to move in the wrong direction. With the year nearly over, 2011 likely will fail to deliver any real improvements to North Carolina’s local job markets or relief for the state’s unemployed residents.”

The Eurozone Debt Web

The BBC recently prepared an interactive graph that nicely depicts the “Eurozone debt web,” including the place of American banks in the tangle of financial connections.

Around The Dial – November 30, 2011

Economic policy reports, blog postings, and media stories of interest:

• Economist’s View asks if people “deserve” poverty.
• Peter Boone and Simon Johnson see the end of the Euro area.
• Felix Salmon points out problems with charitable tax deductions.
• Rortybomb compares responses to unemployment and bank rescues.
• Jean Pisani-Ferry describes “the German hour.”

Some Failure

James Kwak points out an unspoken element of the “failure” of the Super Committee.

To understand the GOP’s victory, consider what the tax landscape would look like if Republicans agreed to everything that Barack Obama asked for in his deficit plan released this September. First of all, taxes for almost all families would hardly change at all. Almost all of the 1997, 2001, and 2003 tax cuts would still be in place. Tax rates for families making less than $250,000 per year would be locked in at the lower rates set in 2001.
…
Obama says he wants to roll back the tax cuts for the rich. But as far as I can tell, he only proposes to roll back one of them — the reduction in the top income tax rate. Under his plan, the top tax rate on capital gains and dividends would be made permanent at 18.8 percent — a figure that includes the 15 percent level set by the 2003 tax cut, plus 3.8 percent for the Medicare payroll tax. The estate tax exemption would be $3.5 million, not $1 million as it was before 2001. The Pease and PEP (personal exemption phaseout) provisions that limit deductions and exemptions for high-income taxpayers, which were suspended by the 2001 tax cut, would be killed permanently. As a result, the top marginal tax rate would be down slightly to 43.4 percent (the 39.6 percent level set in 1993, plus 3.8 percent for the Medicare payroll tax).
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How would the government pay for this? Through huge spending cuts.

Food Insecurity In North Carolina

Louisa Warren of the NC Budget and Tax Center documents the extent of food insecurity present in North Carolina and explains the role that the Supplemental Nutrition Assistance Program has played in helping families and the larger economy during the “Great Recession.” From the report…

The number of individuals receiving food assistance through North Carolina’s Food & Nutrition Services has nearly doubled since the Great Recession started in December 2007 (increase of 94.6 percent). The state has added more than 870,000 Tar Heels to its food assistance program – a little more than the population of Charlotte, North Carolina. As of September 2011, nearly 1 in 5 North Carolinians received food assistance.
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At the local level, the number of persons in households receiving food stamps has grown in every county since the recession began. Urban counties have seen the greatest numbers of people enroll in the food stamps program, but rural areas have seen the deepest change in relative terms. The five counties with the largest percentage increases in their food stamp participation rates—at least quadrupling from September 2007 to September 2011—are Dare, Jones, Pender, Gates, and Duplin. Mecklenburg, Guilford, and Wake counties all nearly doubled their food stamp participation rates and have the highest numbers of individuals enrolled in the program.